IMF raises China’s 2024, 2025 GDP growth forecasts after ‘strong’ first quarter
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China’s economy grew at a faster than expected 5.3 per cent pace year on year in the first quarter.
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BEIJING - China’s economy is set to grow 5 per cent in 2024, after a “strong” first quarter, the International Monetary Fund (IMF) said on May 29, upgrading its earlier forecast of 4.6 per cent expansion, though it expects slower growth in the years ahead.
The IMF said it had revised upward both its 2024 and 2025 gross domestic product targets by 0.4 percentage point, but warned that growth in China would slow to 3.3 per cent by 2029 due to an ageing population and slower expansion in productivity.
“China’s economic growth is projected to remain resilient at 5 per cent in 2024 and slow to 4.5 per cent in 2025,” the global lender said in a statement wrapping up its annual assessment of the world’s second-biggest economy for 2024.
“Strong first-quarter GDP data and recent policy measures” drove the upgrades, it added.
China’s economy grew at a faster-than-expected 5.3 per cent pace year on year in the first quarter, comfortably above analysts’ forecast for a 4.6 per cent gain in a Reuters poll and up from a 5.2 per cent expansion in the previous quarter.
A string of recent economic indicators for April, including factory output, trade and consumer prices, suggests that the economy has successfully navigated some near-term downside risks, but China observers say the jury is still out on whether the bounce is sustainable.
Domestic consumption remains soft and much of that is linked to fragile confidence amid a protracted property-sector crisis that is widely seen as the single biggest stumbling block to a full-blown economic recovery.
Retail sales in April, for instance, grew at their slowest pace since December 2022, when Beijing’s strict zero-Covid curbs were in place, while new home prices fell at their fastest rate in nine years.
The IMF said it welcomed steps announced by policymakers earlier in May to stabilise China’s beleaguered property sector, and said that steps “necessary for steering the sector towards a more sustainable path should continue”. REUTERS
